Balfour Beatty, the international infrastructure group, is hosting an investor seminar in London today, Tuesday 30 November.
During the afternoon, Balfour Beatty management will make presentations to investors and analysts, covering opportunities in infrastructure markets and the Group’s business model, medium-term margins and approach to its Infrastructure investments activity.
Opportunities in infrastructure markets
Over the long term, we expect global infrastructure markets to grow owing to the need to replace ageing infrastructure in developed countries, and to meet the demands of economic growth and demographic trends in emerging countries.
Balfour Beatty business model
We have established a business delivering a full range of capabilities to owners and operators of transport systems, power and water assets and complex buildings. We have leadership positions in the UK, the US, Hong Kong and Australia and now have access to emerging markets through the local knowledge that Parsons Brinckerhoff has brought to the Group. These strengths, combined with the core skills that are common to all of our activities, i.e. technical expertise, local knowledge, integration capability and the ability to serve complex customers, position us well to benefit from infrastructure market growth and to deliver value to shareholders.
Improving profit margins
In the next five years, we expect to be able to improve the operating margins of our divisions through better utilisation of resources, particularly in our Professional services division, and the efficiency savings we have previously announced.
Therefore we believe that we have scope to improve the operating margin of the Group to 3.5-4% over the medium-term through a combination of achieving higher margins in the divisions and the continuing greater role of professional and support services in our business mix.
New approach to infrastructure investments
As our investment portfolio becomes more mature, we are evolving our approach to the way we deploy capital to investments. We are therefore intending to sell £200-300 million worth of assets over the next five years and expect to deliver earnings which will enhance the Group’s profits. We intend to use the cash proceeds to develop new assets and to deliver returns to shareholders in the form of an increment to dividends.
Establishment of infrastructure funds management business
We are also pleased to announce today that we are in the early stages of setting up an infrastructure funds management business. The funds management team will be headed by Rob Gregor, formerly Head of European Infrastructure at AMP Capital Investors. The proposed fund will be focused on core economic infrastructure and will be chaired by Andy Friend, formerly CEO of Laing plc. Balfour Beatty will be an investor in the fund.
The presentations will be webcast live from 14:00 (UK time) onwards on the company's website, www.balfourbeatty.com. The webcast should last about three hours and will also be available for replay after the event.
Balfour Beatty plc
Tel 020 7216 6924
Balfour Beatty plc
Tel 020 7216 6865
This announcement may include certain forward-looking statements, beliefs or opinions, including statements with respect to Balfour Beatty plc’s business, financial condition and results of operations. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each case, their negative or other various or comparable terminology. These statements reflect the Balfour Beatty plc Directors’ beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation: developments in the global economy; changes in UK and US government policies, spending and procurement methodologies; and the failure in Balfour Beatty's health, safety or environmental policies.
No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Forward-looking statements speak only as at the date of the relevant materials and Balfour Beatty plc and its advisers expressly disclaim any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in the materials. No statement in the announcement is intended to be, or intended to be construed as, a profit forecast or to be interpreted to mean that earnings per Balfour Beatty plc share for the current or future financial years will necessarily match or exceed the historical earnings per Balfour Beatty plc share. As a result, you are cautioned not to place any undue reliance on such forward-looking statements.
Notes to Editors:
- Balfour Beatty (www.balfourbeatty.com) is a world-class infrastructure group with capabilities in professional services, construction services, support services and infrastructure investments.
We work in partnership with our customers principally in the UK, continental Europe, the US, South-East Asia, Australia and the Middle East, who value the highest levels of quality, safety and technical expertise.
Key infrastructure markets include transportation (roads, rail and airports); social infrastructure (education, specialist healthcare, and various types of accommodation); utilities (water, gas and power transmission and generation) and commercial (offices, leisure and retail).
The Group delivers services essential to the development, creation and care of these infrastructure assets including project design, financing and management, engineering and construction, and facilities management services.
Balfour Beatty employs 50,000 people around the world.